About this Show

Tonight From Washington

News/Business. News.

NETWORK

DURATION
03:01:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 17

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Pakistan 64, Faa 15, Nawaz Sharif 12, Mr. Calabrese 12, India 11, Us 10, Punjab 7, Mr. Maclin 4, United States 4, Sotomayor 4, U.s. 4, China 4, Mr. Conyers 3, California 3, Boston 3, Mr. Scott 3, Scott 3, Mr. Villasenor 3, Washington 3, New York City 2,
Borrow a DVD
of this show
  CSPAN    Tonight From Washington    News/Business. News.  

    May 17, 2013
    8:00 - 11:00pm EDT  

8:00pm
>> at the house hearing, testimony on lakeland privacy issues that the domestic use of drones. congress is considering legislation to limit drone youth and establish privacy protection. congressman james sensenbrenner chairs the judiciary subcommittee hearing. >> the subcommittee on homeland
8:01pm
security investigations will come to order. today were having a hearing called ice in the sky, domestic use it on an aerial systems and this is dealing with these the systems within the united states. there are a lot of privacy and civil liberties concerns that are raised in the air. we are supposed to have those about 10:00 and to try to get to hear it over prior to the time we have those because i'm not think many numbers will come back. i'm going to ask first unanimous consent that bashir be authorized to declare recesses manera votes on the floor and second line, i ask unanimous consent that all members opening statements be placed in the record, including nine in the ranking members. at this time, i would go to the ranking member, mr. scott to see
8:02pm
what he wants to say piercer that companies are examining these topics and look forward to my topics to jboss and perform expectation of privacy to emerging technology and not the resume statement be placed in the record. >> without objection. a very distinguished panel today became nicer and witnesses before introducing them. if he would, please all rise. do he would issue someplace where the testimony you're about to get to this committee will be the truth, whole truth and nothing but the truth so help you god? let the record show all the witnesses have been in the affirmative and please be seated. i'll be very brief in the opening introductions. our first witness is mr. john villasenor who is a nonresident caller and senior fellow in governance studies at the center to knowledge and center for technology innovation at brookings.
8:03pm
he's a professor professor of electrical engineering, public policy at ucla in number of the economic forum's global agenda council on the intellectual property system. mr. mcneil is professor at pepperdine university school of law and previously served as the assistant director of the institute for global security and codirected a transitional counterterrorism program for the justice department. mr. tracey mclean is professor at boston university school of law. he served the counsel of record for the aclu and issues addressed in first amendment issues. mr. calabrese is the legislative council for privacy related issues and the washington legislative office. prior to that, he served as the project council on the aclu technology and liberty project.
8:04pm
with that, i say without objection all the witnesses full text this will be placed into the record. each of you will have five minutes to summarize your false statement. we have a timer in front of you. i think you're all familiar with the green, yellow and red lights. you are first. >> good morning, chairman sensenbrenner, ranking member scott and members of the subcommittee. thank you for the opportunity to testify in the topic of privacy and unmanned aircraft systems are ua asked. i'm a nonresident senior innovation at the brookings institution. i'm also professor at ucla were held appointments and electrical engineering department to department of public policy. that is express to my own do not necessarily represent those of
8:05pm
the brookings institution or university of california. when discussing privacy is helpful to keep in mind the greater platforms possible by the rapidly developing to elegy. some aircraft used by the u.s. military are as large in its fastest business jets. sun can stay out for very long periods of time in the summer of 20 time, the wingspan of slightly over 110 pounds for her to continue speaks of arizona. though it is under contract to develop a solar eco-bush will set up the stratosphere for five continuous years. the hummingbird by california-based aronberg is two thirds of amounts, clicking on her video camera. a few weeks ago a team of harvard researchers will support the fight of the robo beat, robotic and that by my electricity through a thin wire an external power source.
8:06pm
it weighs less than 1307-ounce. unmanned aircraft can be applied in atlas writer civilian applications. the overwhelming majority beneficial. they can identify in need of assistance on a natural disaster and provide industry to police officers and a hostage standoff in agriculture can be used for scientific applications of air quality assessment of whether tracking and measuring dynamics of our storms. unmanned aircraft will provide the african import tool for gathering as well and generate economic benefits by creating jobs and production and spurred advances in robotics that apply will be on aviation manufacturing the surgery. however, like any technology, unmanned aircraft can be a spirit or a legitimate important privacy concerns if unmanned aircraft operated by nongovernment entities, producing most tension between
8:07pm
first amendment freedoms, law and statutory protections that the first amendment to gather information is extensive but not unfounded and ends with a as an invasion of privacy. with respect to unmanned aircraft systems the fourth amendment is of course central to the privacy question. the supreme court is never explicitly considered observations using unmanned aircraft, careful examination suggest the fourth amendment will provide a stronger measure of protection against government unmanned aircraft privacy abuses by the appreciated. the fourth amendment has served us well since ratification of the 291 and there's a reason to suspect it will be unable to do so or unmanned aircraft are widely used. this does not think there is no need for additional statutory unmanned aircraft privacy protections. in make sense to consider purply about legislation. when considering new laws, it's important to recognize the inherent difficulty of predicting the future of any rapidly changing to elegy.
8:08pm
legislative initiatives in the name of privacy would likely have impeded growth while failing to address the more complex privacy issues that arose in the subsequent decade with the advent of social networking and location wireless services. when considering muskrat manned aircraft privacy, it's important to recognize the power of existing legal frameworks. they play a vital role preserving privacy with a lengthening list of technologies that might be misused. some of the best men i nonstatutory tax with a canine the latest innovations and unmanned aircraft elegy about a constitutional draft to 200 years ago. thank you for the opportunity to testify in import topic. >> good morning mr. chairman, ranking member scott, please to be here to testify on this issue. i want to commend the subcommittee for the approach you are taking, too. this is a difficult issue to
8:09pm
legislate on the approach is a wise one beginning with our fourth amendment precedents and working our way through various privacy considerations. plumbing prospect of unmanned aerial vehicles coelho quit nomads drones has concerns regarding privacy. both of us some call the legislation mandating nearly all uses be prohibited unless the government its first obtain a warrant is such an approach would exceed requirements of the fourth amendment and the two perverse results in some instances. the piece of information and little at the same information is gathered via any other means. thursday to elegy approach to privacy misses the mark. privacy is a public policy to the gathering use of information. this outlines. issues they'll be accompanied by
8:10pm
proposals that prohibit the collection of evidence for information unless authorized are overbroad and in 190 advice. such legislation treats information differently than information gathered from a manned aircraft, different from that by a police officer on patrol car or officer in a patrol. police are not required until they have a requirement on the collection of information. second, congress should prohibit the use of any evidence gathered by drones. such restriction may only serve to protect criminals will not deterring government wrongdoing. third, congress chooses to impose a requirement, you should consider codifying some exceptions to the warrant requirement. for example, issue codify as the supreme court is out of
8:11pm
suppressing evidence of serious consequences for the truth seeking a monstrous and objectives of criminal justice and associate present my obstacle for those searching for application. should be a last resort, not her first impulse. as such, measures for implying the rules should not be whether a drama series but with the benefits of deterrence outweigh the costs. fourth, congress should send time defining terminology and specifying the places are entitled to privacy protection. but a layperson sees, what a legislation needs in a court may think it natural different things. as such terms like search, surveillance, the small expectations, private property, public place another term suburbia's lawyers are familiar with, congress should specify what the terms mean. this'll be the most important part of the legislative drafting process as the terminology will drive the actions are allowable and what places are entitled to
8:12pm
privacy protection. congress should adopt and be prepared to reject existing terminology, which may be confusing or is under protect it. congress may want to consider simple surveillance. some of the ways congress might want to look at this with ease to craft a sliding scale for surveillance that looks at the duration for which surveillance might be conducted rather than the platform from which there surveillances launched, from which the surveillance takes place. congress should consider transparency and accountability perhaps in lieu of a requirement or suppression roles. transparency and accountability measures may be more effective than roeser warrants for controlling and returning surveillance. congress should mandate the use of bolognese systems on a regular basis, on the website operating system, they should
8:13pm
detail who operate the system, what is operated, perhaps including gps coordinates of a cologne for some purpose for the operation was. i was a mandate manufacturers make their systems for software for the easy export that contain misinformation. privacy advocates and citizens closely monitor how drugs are used to the process as a mechanism to check government action by the deadline on the course. the emergency vehicles raises understandable privacy concern that require careful and creative legislation rather than pursuing a specific approach, congress should consider legislation to make use of systems more transparent and empowering people to hold government accountable. thank you. >> thank you very much. mr. macklin.
8:14pm
>> sorry. thank you, mr. chairman. ranking member scott, members of the committee for inviting me to testify in the fourth amendment issue surrounding the domestic use of drugs by law enforcement officials. the constitutionality of drones from for some purposes raises several important questions that are not easily answered by the supreme court's jurisprudence. as you know, drones are equipped with sophisticated cameras, license plate readers and laser radar systems. according to recent paper by congressional research service, drones will soon be able to operate with facial recognition or soft biometric recognition equipment to recognize and track individuals is an attribute such as height, age, gender, skin color. ..
8:15pm
i agree with our previous speaker that thecourt's 1980 rulings do not control the use of drone capable of capturing much more detail unavailable to human eye.
8:16pm
furthermore, it's important to recognize that even among justices of the current court, that the definition of what constitutes a search and what triggers the fourth amendment is subject to change and i would say is in a state of flux. in the recent gps case, united states vs. jones, five justice indicated a willingness to reassess practice divisional notions of privacy. justice sotomayor encouraged her colleagues to reconsider the court's traditional analysis for even short-term monitoring of a person's public activities. and justice alito, not going as far, indicated his willingness to consider the court's current case from justice alito's dissent, he said using of gps investigations of most criminal investigations impinges
8:17pm
expectation office privacy. what i read from that, five of the justices are saying that you have an expectation of privacy, vis-a-vis, long term electronic monitoring when you're in the public. if you you have that expectation of privacy at least by five of the justices when you're on the street, you ought to have the same level of expectation of privacysen your own property, notwithstanding the fact that a drone may or may not be in navigable air space. the final thing the committee s should consider in considering whether the drone constitutes a search, i would urge the committee to avoid resolving this question with a litmus test or legal terms of art. the expectation of privacy test is a subjective test most of the justices acknowledged that. responsible for the suspect
8:18pm
addition of privacy test disavows that test in a 1971 decision. often judges, when citing fourth amendment cases, will simply say, all the fourth amendment requires is reasonableness. and they will judge the case accordingly. in these cases, the courts typically apply a rational basis test, deciding whether the it was legitimate governmental interest. this degree to deference to police suggest is at odds with the fourth amendment. the fourth amendment is not asserted to the bill of rights so judges could defer to governmental intrusion on privacy. rather, we know the amendment was put the bill of rights so the government -- >> thank you very much, mark maclin, mr. calabrese.
8:19pm
>> thank you for letting me testify today. the use of drones raises significant new problems which cannot be adequately addressed. drones share some characteristics of manned aerial surveillance, such as planes and helicopters, but the privacy invasion they represent is substantially greater in both scope and volume. manned aircraft are expensive to purchase, operate, and maintain. this expense is always imposed a natural limit on the government's aerial surveillance capability. drones' low cost and flexibility erode that natural limit. small hovering platforms can explore hidden spaces or peer in windows and large static blimps i can make continueous long term monitoring. ongoing improvements in computing technology exacerbate
8:20pm
these privacy issues. high-power night vision cameras -- imagine technology similar to the naked body scanners at the airport attached to a drone. wireless internet, it's possible to track specific individuals with multiple drone. uses could extend from high-tech long-term surveillance to traffic enforcement. while drones have beneficial use for search and rescue missions, firefighting, dangerous police tactical operations, the technological reality points to significant possible harm if left unchecked. with the use of video cameras we have seen ongoing problems of voyeurism and racial profile big operators. if there's a per sis extent 0 dane ore offuponner toking people with change how they act in public, whether a protest rally or sunning in the
8:21pm
backyard. drones must be integrated into the federal air space by 2015. while the use of this technology is poised to explode, current law has not yet caught up to this new technology. the supreme court has authorized aerial surveillance and photography of private property. the court may eventually extend fourth amendment protections to ongoing unlimited out maded tracking but no cases have been decided around drone use. the states protections are in their infancy. as the entity that regulates the skies the federal government is in the best position to create lieus for the use of drones by law enforcement. the acl recommends the rules be based on, first no mass surveillance. no one should be spied upon by the government unless the government believes that person has committed a crime. drone use over private property should only happen with a search warrant based on probable cause.
8:22pm
the same standard used to search someone's house or business. it may be permissible to monitor individuals in public at a lower standard, perhaps reasonable suspicion, but the key is to prevent mass suspicionless searches of the general population in order to protect this use of drones, exemptions to the rule should be limited to emergencies connected to life and safety, or narrowly drawn administrative exceptions. second, information collected from drones for one purpose to combat a fire or perform a search and rescue, should not be used for another purpose, such as general law enforcement. information collected by drones should be kept second securely and toy steroid promptly once it is no longer needed. third, drones should not carry weapons. weapons developed on the battlefield in iraq and afghanistan have no place in the united states. there's a consensus forming on this issue. the fact that heritage foundation and the international association of chiefs of police, both support sharp limits on
8:23pm
weaponnized drones. finally, oversight is crucial. communities, not just law enforcement. must play a central role in whether to purchase a drone. drone use must be monitored to make sure it's a wise investment. drones should only be used as subject to a powerful framework that regulates their use in order to avoid abuse and invasions of privacy. the aclu believese som members of the committee have already taken great strides to find this balance with hr637, the preserves americans' privacy act. we support this bipartisan legislation and urge the committee to make making it up a priority. >> thank you very much, mr. chairman. the chair will recognize members to ask questions under the five-minute rule and the first up will be the chairman of the full committee, gentleman fromm
8:24pm
virginia. >> thank you, mr. chairman, and i appreciate your holding theirs hearing and i would ask my openings statement be made part of the record. >> without objection. >> thank you. is it villasenor? >> close enough. >> do you believe the congress -- which do you believe are in the best position to regulate drones, courts, congress, or the states. >> host: , in terms of actually regulating -- is the question specific to privacy in. >> primarily. >> privacy, with respect to law enforcement use, i'm on record stating i believe it's a fourth amendment is going to provide quite a bit more protection, and with respect to private party use, which has not been the focus as much attention as public use, at it of course at the state level you have statutes against invasion of privacy, stalking, harassment and the like, and there's a role at the state level to ensure the
8:25pm
statutes properly anticipate privacy issues. >> mr. mcneal, should congress regulate the future commercial use of unmanned aircraft, or, as suggested, that could be left to the states? >> i'm not sure -- with regard to the privacy issues, i'm not sure that congress -- that you can get around privacy without looking -- without congress doing it so let me rephrases that. for commercial uses, if we're concerned about privacy, it seems that congress is the most appropriate body to legislate in a way way have equal laws, but i'm in the same camp that if we think the fourth amendment protections that exist are sufficient, we could copy those over for commercial purposes and adopt those as our statutes for privacy protection.
8:26pm
the problem with commercial use is that we have a big body of law on privacy with regard to what law enforcement does but far fewer rules with regard to what private parties or commercial parties might do. so this is one of the things people get concerned about, commercial uses being just my neighbor flying around doing video for photography or his youtube page or for real estate purposes that can then start to look a lot like snooping or peeping tom types of things. some of that is covered by state laws, but when you look at the line of cases where people have been able to successfully sue when they feel like their privacy rights are being violated you don't see a lot of success. it's a high bar to overcome and there might be some room for congress to regulate. but i don't think that is the -- when you look at the big time commercial uses, flight of up manned systems for -- unmanned
8:27pm
systems for fedex, privacy isn't the big issue that is driving our concerns there. it's more safety concerns. >> thank you. mr. calabrese, i take it from your warrant-based approach to use of uafs by governmental entities you do have a an exception for an emergency situation. so, for example, if the tsarnaev brothers in boston had been somehow detected by a drone, that would still be evidence admissible in court under your circumstances if they're following them down the street and they were either impeded from placing their explosives or were not impeded but that evidence was available to show that they were the perpetrators of the crime? >> yes, that's correct.
8:28pm
as mr. poe's legislation indicates, there's a strong emergency exception that allows in the cases of danger to life or limb, the use of droneness order to provide a -- have to play out the scenario in terms of where they are in the investigation, but, yes, there's clearly a strong emergency exception as well as the ability to act before a warrant is issued. >> mr. maclin, can you explain how uas may affect police discretion and whether police discretion is something shoot be limited by statute? >> i think it should be limited by statute. when i talk about police discretion i'm talking about the ability of law enforcement to simply fly a drone over, examine, surveil, without any probable cause or reason suspicion, and certainly if you don't have either one of those two things you can't get a warrant. i would take slight objection with the notion that if we're going to require warrants, we should allow possibly allow warrants based on reasonable
8:29pm
suspicion. the court, i think, albeit other than the administrative search context, said when you need a warrant it has to be based on probable cause. >> thank you, mr. chairman. >> the gentleman's times has expired. the gentleman from virginia, mr. scott. >> thank you, mr. chairman, mr. calabrese, can you say a word how the technology has complicated the issue in terms of the difference between a -- one photograph all the way to tracking someone even in public for a long period of time, what the expectation is in. >> surely, mr. scott. thank you. it's a great question. to be clear, it's actually not just drones, right? if you think about the technologies at issue here you can imagine tracking with the drone, coupled with tracking using a cell phone, which i know was considered recently, and tracking with the license plate scanner, and all of these could be used to really provide mass surveillance all the time, but
8:30pm
in terms specifically of drones, they've been smaller, cheaper, the surveillance technology on them can penetrate more deeply at night, you know, with smaller and greater cameras. a nova special indicated one camera, called the argos, could cover multiple square miles and do detailed surveillance of an entire city. imagine that technology, coupled with surveillance, you know, it changes the way people think of as public and what a public space is. it really merits further regulation by congress. >> you mentioned the problem with weapons. are weapons ever appropriate with drones? >> i think we need to explore the question of weaponnization carefully. by and large the answer is, no. weapons shouldn't be used because a drone is not in the same kind of danger as a police
8:31pm
officer is. clearly a police officer has got to be able to defend himself. we all understand that. or take appropriate action to apprehend someone. a drone is not going to need to defend itself. it is not going to need to apprehend anyone, and a drone operator may not have the same judgment or expertise, peering through a little cam remark as a police officer does on the ground. all of that argues against weaponnization. there may be some limited exceptions for training or other purposes but by and large weapons don't belong on drones. >> you mentioned the possibility of discrimination. can you say a word about how you choose which areas are under surveillance? >> well, i think that is an outstanding question. goes to a couple of important questions. one is having the community be involved. you should know if there's surveillance. the community should be able to decide if they think getting a drone is an appropriate tool and how it should be used. also, just in the question of discrimination generally, we
8:32pm
have seen in monitoring video cameras that video surveillance is frequently a very boring task for an operator. it's dull, minds tend to wander, they tend to toe follow around. the research says they tend to follow around pretty girl and then follow their biases and look for particular, you know, racial minorities they may think are more likely to commit crimes. we think it's very probable that could happen with the drone as well. >> you mean in terms of selecting the areas to be under surveillance? >> not just the areas but the individuals. if you had mass surveillance over an area they may pick out particular individuals and follow them around to see if they commit crimes. >> if you have a legal exception for surveillance in a recording, what happens if you see something that you didn't have probable cause to suspect but you noticed because it was under surveillance? >> well, think that's going to
8:33pm
relatively uncommon. we do have an exception -- >> the entire traffic area, traffic surveillance, and you say that's okay, and you see some drug deal over on the side, do you get to use that? >> i think we would hope that we wouldn't have mass surveillance like that. we wouldn't have cameras up in the sky all the time. so, you know, we would assume that surveillance would largely be by drone, largely be directed and targeted so if individual acts were already being monitored by law enforcement, we expect they would likely come under an existing reasonable suspicion standard as the investigation was done, for example, in public, because we would already have a court order that would say it's okay to do drone use in public at these particular times. >> if you have all this stuff recorded, could there be a limitation on what you can do with it of you've got it?
8:34pm
>> i think there has to be, yes. i think we don't want people to be recorded all the time. we don't want to feel like those drones are constantly monitoring them. and we want people to know that they're safe, but not just in private but in public to live their lives without worrying what they do is going to end up on youtube. >> gentleman's time expired. under the procedures that have been announced by the chairman of the committee, full committee members who are not members of a subcommittee are entitled to sit on the dyas -- dais but are not entitled to ask questions until time is yielded, and under that proceed sure the chair yield his five minutes to the gentleman from texas, mr. paul. >> thank you, mr. chairman, i appreciate you yielding and all four of you being here. i guess the crowning decision,
8:35pm
concept, is the supreme court's dicta, for lack of a better phrase, of expectation of privacy down the road, is going to be not expanded but made smaller. i think that is what the court -- members of the court to me are saying, which concerns me. so, it seems to me that congress in the area of drones needs to set a standard rather than let the courts down the road set a standard. i'm from houston, and our local sheriff of the county, sheriff adrian garcia,. third largest county in the country, won't use any kind of drone because he doesn't know what the law is going to be and doesn't want to wait for the supreme court to rule on a search ten years from now, throw out a case he has rested some bad guy and put him in jail. so he is not using drones. he is waiting for somebody to give him and other law enforcement agencies some
8:36pm
direction on the use of drones. it seems to me two issues. law enforcement use, and private use. and what is the expectation of privacy in those areas, and should we do anything or just wait? mr. calabrese, there's been comments made that the court should make these decisions about the fourth amendment, whichcourts have been doing, applying what is lawful or not lawful under the fourth amendment should the courts be the answer for solving this issue of drones and the fourth amendment? >> well, i think that your legislation does a very good job of creating a careful balance. something that congress is particularly good at and the courts are not always particularly good at. we -- when we think about how we would want to use a drone, it's clear that most of the uses, finding a missing person,
8:37pm
fighting a forest fire, are not uses that particularly implicate the fourth amendment in your legislation is very careful to carve those out and by using clarity you can use drones for good purposes, including commercial purposes, where people don't have to worry about the drone in the sky spying on them. you allow for the growth of the industry and still protecting people's privacy. so congress absolutely has role and it's a very strong role and one that you are well suited to perform. >> what about the faa? right now the faa decides who gets a permit for a drone. they make that decision. the president has weighed in on that. told the faa to be sensitivity concerns when giving a new permit. >> i think the faa has a role in things like deciding what i
8:38pm
going to happen with information once it's collected, providing notice of where what particular drone are being thrown and how. but i think -- are being flown and how. but congress has the responsibility of regulating the government. congress has to decide how the police, how the fourth amendment should be internal -- interpreted. congress has a role of interpreting the constitutional. you're constitutional officers. so the faa can perform an expert function. i think congress' role has to remain central. >> since the issue of drones has come up, there are a lot in the industry, the drone industry and other industries saying, of we're going to talk about the fourth amendment, let's expand it and revisit the whole concept of the fourth amendment and not just with drones but with all new technologies. what do you think about that? >> i certainly believe in expanding the fourth amendment. there's no question about that. i know you do as well. i think the committee is doing that right now.
8:39pm
you're not just considering drones. you're also considering surveillance with cell phones, you have had another hearing on electronic communications privacy. so you really are revisiting the entire issue and doing it in a very intelligent and very deliberative manner. so, this is a piece of that. >> so once again, on the other technologies, and some yet to be invented, should congress set the standard perimeters on law enforcement, civilian use, or should we just, again, wait for the supreme court to make those ultimate decisions. >> i think that it's -- the 21st century, as we have gotten new technologies, we have to make sure our values come with us. that we don't lose those constitutional values as we move to new technologies. you, of course, are perfect live suited to do that. >> the gentleman's time has expired. the gentleman from michigan,
8:40pm
mr. conyers. >> thank you very much. could i ask mr. villasenor, professor mcneal, and professor maclin, have you heard about poe legislation, preserving american privacy act and are you able to comment on it at all? >> yes, i'm certainly -- first of all, very appreciative of any attention that congress is giving to this very important issue. one of the concerns i have with overly broad requirements is that the problems that can arise -- i certainly agree that we should not countenance government fishing expected additions using unmanned aircraft or any other technology. but for example, suppose that law enforcement on an unmanned aircraft isg an b traffic accidt
8:41pm
and on the sidewalk a terrible takes place and the video from the device is the only individual you. it would defy reason for us to say to the victim we know who the perpetrator is but we're going to let them go because we don't have a airport ask there's legislation that says we can't use it. i think we need be to cognizant of the potentially bad -- unintended consequences of what sounds at first blush like something which is only going to be good. >> mr. mcneal. >> so mr. villasenor highlighted a point i make in my written testimony. i provide a few examples where the legislation, the current preserving american privacy act and the one of 2012 as well, where they're both create a circumstance where we might be suppressing inadvertently discovered information.
8:42pm
we're doing search and rescue mission, for example in public parks, and along the way, you come across evidence of a crime and now that evidence can't be used. some privacy advocates want a ban on the use of the secondary evidence in all circumstances, and i understand the impulse. the idea is that if you say you're using it for search and rescue purposes and then you use the evidence for crime collection purposes, it presents this circumstance where we might have the general surveillance we're all somewhat concerned with. but i think there has to be some way in the legislation we craft an exception for that. >> thank you. professor maclin. >> mr. conyers, i'm not in a position to comment on it bass i haven't stud yesterday it. i wouldn't want to express an opinion. >> of course. let me turn now to the very disturbing consideration of this
8:43pm
general subject. you know, this is a prime example of technology overtaking established law, and i think we are going to have to go beyond the fourth amendment. they're going to have to be a body of statutes that go into some of this detail. it's not all about privacy but privacy is, of course, always a continuing exception. do any of you want to recommend to this subcommittee, which might be the ones that take on this responsibility, any courses of action that we might take to examine all of this as has been remarked, this goes beyond drone, because there could be
8:44pm
new technology coming out to further complicate it. >> you hit the nail on the head when you said this goes beyond drones. in new york city, nypd has a helicopter, they call it 23, for the 23nypd officers killed on. it has a camera that can observe activity two miles awa it's-ou can see the dai on people's faces, read their name tag, from up to two miles away. so this isn't a drone specific thing. it's advancement of technology thing. so the approach, if congress wanted to legislate, would be to look at the issue of surveillance, define what surveillance is, and i put some definitions in my written testimony, and then create some lines based on the duration of surveillance that would maybe -- maybe we allow officers at their own discretion to observe individuals from any platform for a period of time, let's say two hours in a seven-day period. and once we get to the owned of the seven-day period, they need
8:45pm
reasonable suspicion to continue the surveillance for a 48-hour period of time, and then anything longer than that might require a warrant. and the times i have thrown out are just my sort of best guess at what be good privacy protection. some might but it at 20 minutes, some might put it higher. but we're treating all technology the same. so a camera trained on someone's home persistently, day after day, will be treated the same as if it's a camera on a drone or someone on a rooftop. >> the gentleman's time has expired. the gentleman from arizona, mr. franks. >> thank you marx chairman. mr. chairman, i have the privilege of being on the armed services committee where we often have to struggle with issues of unmanned aerial vehicles, because more and more the technology is allowing us almost to pilot from the ground in many different circumstances.
8:46pm
and this is also true of missile technology. it's guided missiles and piloted on the ground aerial vehicles. this technology is beginning to merge and presents some significant challenges. we like to say, never send a man to do a missile's job. but the reality is that the technology becoming more and more difficult and raises constitutional issues, as i think the previous gentleman very astutely articulated. so, i guess that my first question is how to apply the time-honored constitutional principles, according to original intent in a way that is reasonable and appropriate? let me give this example and i'll ask mr. maclin if he would respond. just recently the city of boston endured obviously a terrible terrorist attack, and the street cameras recording the scene froe
8:47pm
terrorists. then the police used thermal images from helicopters to locate the armed suspect as he hid from the police. any of these images could have been derived from unmanned air craft. so, constitutionally, mr. maclin -- this is not a trick question. thought mr. conyers' point was very spot on. does it matter to you constitutionally whether those street images in that case came from a street camera or unmanned aerial surveillance? >> constitutionally speaking, no, i don't think it matters. what matters is who is responsible for those cameras. nowings, i may be mistaken but i believe one of the cameras was from lord and taylor, the lord
8:48pm
and taylor store. let's assume they were put up with the city of boston. constitutionally speaking, no, doesn't matter. >> then let me direct the question to mr. calabrese? you state in your testimony the uas would be acceptable to you for, quote, reasonable, nonlaw enforcement purposes, by nonlaw enforcement agencies, for where privacy will not be affected and surveillance will not be used for secondary law enforcement purposes, and to mr. -- to the previous gentleman, mr. maclin's comment. so it's your position, if i'm -- that the fourth amendment applies only to law enforcement agencies, for law enforcement purposes. >> to the government generally. i'm sorry. as opposed to -- the fourth amendment applies to the government generally. >> for reasonable nonlaw
8:49pm
enforcement purposes it would no longer apply. >> well, wouldn't say the fourth amendment doesn't apply. i think the biggest -- the fourth amendment amendment is always going to apply -- >> i'm reading what you said. i'm sorry. what we believe the biggest danger is that law enforcement will use drones in an invasive manner. we still want to create the ability of government to use drones in a noninvasive manner. a firefighter is a government agent. they should be able to use a drone to investigate a fire. they don't want to keep that from happening. it's not a search for law enforcement purposes. >> seems to me a pretty challenging parsing there if one tries to apply the fourth amendment to nonlaw enforcement agencies different than law enforcement agencies, when the effect is the same.
8:50pm
and i know that's one of those issues we'll grapple with a very long time would anyone else on the panel like to address either/or those questions? >> i just want to direct you to page six of my testimony where i tried to thread his -- thread this needle. what we need to focus is on the legislation that will address this policy concern you bought up and that requires definition of what a search is that might go beyond the fourth amendment. the thing being he have talk about here this distinction between a general search, parking a blimp over a town, versus a targeted search against a particular individual, and i think we'll want to dress those two different types of searches. new york city, for example, is such a general -- cameras, and that's different than -- >> the gentleman's time has expired. the gentlewoman, miss bass.
8:51pm
>> i just want to ask some questions of the panel in general about what you believe laws and restrictions restrictie placed on drone use by private citizens to conduct aerial surveillance. it's my understanding if a private citizen wants to use a drone they have to get faa approval. but beyond that, i wanted to know if you had suggestions. >> maybe i can at least partially try to respond to that question. first of all, couragely the commercial use in the united states of unmanned aircraft is not permitted or the faa is in the process, under the faa modernization and reauthorization act of 2012, and is in the process of drafting those regulations. >> they're to come. >> they're to come. and by late 2015, those regulations would be complete. so the question is, a reasonable
8:52pm
one. there's a very significant body of common law, as well as in most states statutes, both civil and criminal, related to invasion of privacy, and those statutes are usually tied to -- this reasonable expect taught of privacy. so if it is used in a man that's right does invade privacy it's actable under multiple grounds and i'm confident there are protections, although there is also a good reason to sort of look at the statutes to make sure things like harassment and stalking statutes also cover potential misuse. >> in my area there's the concern over the paparazzi, which has gone to some extreme lengths to invade people's privacy. >> i'm not going to defend the privacy invasions that paparazzi commit. i think we all know they happen, and that's not a technology problem. that's a paparazzi problem.
8:53pm
>> any other comments? >> i would just say that the private use does raise serious first amendment concerns. we think there's a lot of existing law around invasions of privacy, at both the state level and also to some extent at the federal level. it's in the intentional invasion of privacy under tort law, it is peeping tom laws, trespass laws, and of course, california specific paparazzi law as well. so, i think that unlike the fourth amendment government context, where it's largely unregulated and the committee needs to focus, ooh there is a fair amount of existings law and may be appropriate to see how that plays out before we do a lot of legislating in the private use area. >> anyone else? you know, when i learn about some of the drones being so small, like the size of a bird or whatever, how do you see in the future that being regulated?
8:54pm
i mean, what is to stop an individual from just getting that without faa approval? >> well, i think there's already a hobbyist exception for unmanned aircraft, model aircraft, as defined in the legislation, and i think, frankly, it's very important to provide exceptions to hobbyists and so that a parent who goes and flies a model aircraft at a flying field with his or her child doesn't need to get faa approval before doing so. so, at the very small enthere's going to be some flexibility in terms of declaring the platforms, but it's the use where we draw the line, used in otherwise unlawful manner, that's when we address that behavior. >> okay. thank you. i yield back my time. >> gentleman from utah.
8:55pm
mr. chaffetz. >> i think this is an important topic. the rapid expansion of technology. technology is great as long as it's used in the right and proper way. i want to talk about the jones case. i walked in late. i was interested by justice sotomayor's opinion on this. obviously a 9-0 ruling is fairly conclusive but does beg the question of what other areas should this be applicable to? from your perspective, and experience, are current justice department and the implementation by the fbi and others, have they taken this jones case and implemented the way you see it should be implemented or are they missing somebody here? what should the justice department and at the third government be doing with that jones case? start with mr. calabrese.
8:56pm
>> obviously the jones case deals with location tracking and in the acul's view the government has been deefficient applying jones. we believe that a majority of the court no matter how you read it, said that systemic tracking of individuals over time imcomplicates the fourth amendment and is a search. given that rational we believe that all manner of traffic undertaken by the government, whether that's cell phone tracking, tracking of a gps device, implicates the fourth amendment and should be done with a warrant. it's a good request whether that should be expanded to drone. drones could be used to track an individual for long durationness a very detailed manner. perhaps usv jones will come to regulate headropeses used. >> i -- how drones are used.
8:57pm
>> i think the scope of jones is unwritten. certainly justice sotomayor and justice alito's opinion talk about electronic monitoring. justice scalia's opinion is careful not to rely on any concerns about electronic monitoring. his opinion was solely about the physical intrusion and the purpose for the governmental conduct. and i think if you read the most recent ruling from the court in this area, florida vs. jordan, justice scalia writing the majority opinion, you see the focus of the concern on the physical intrusion in that case. so i think with respect to jones, i'm not -- >> what is your opinion? it seems to be short-sighted to think that just the physical intrusion -- >> i agree with that. my own personal opinion is that the concerns of the monitoring are more important because we're already at a time when
8:58pm
government doesn't need a physical intrusion. >> you can triangulate things electronically without actually physically attaching something, and that's my concern, mr. chairman. if we look at this, i do -- i have a geo location bill. i don't think it is just merely the physical intrusion of attaching a gps device. technology over the course of time. i do think -- and let me get to the other two gentlemen's opinion of this. i think one of the things we need look at, mr. chairman, is air space. if you have private property and you hey have something small or large. a five acre parcel of land, i think there's a reasonable expectation of privacy that isn't just limited by walking down the street and you put up a fence. i think the air space is something in general that we should look at. maybe if you can talk to that and jones. i want to leave time for the last person as well. >> what you have articulated as
8:59pm
the reasonable expectation of privacy that you expect and your constituents expect is something that is broader than the supreme court has articulated. so going back to the oliver case and the other aerial surveillance questiones, going cats and if you want to protect the air space over someone's yard it will require legislation because the court doesn't seem prepared to identify that yet. >> time is almost up. >> i read jones more optimistically than perhaps many with respect to permitting long-term extend surveillance. justice alito was joined by three justices in concurrence, and then justice sotomayor agreed with justice alito's statement that long-term tracking itself, even without the actual trespass, the attachment of the device was rome that violated a reasonable expectation of privacy, and even justice scalia in his majority opinion saiday be
9:00pm
uncns so i'm quite encouraged that the supreme court would find that unconstitutional. >> think that's the right direction -- injury the gentleman's time has expired. the gentleman from last, mr. richmond. >> thank you, mr. chairman. let me start with you. a lot of conversation and a lot of what goes on depends on reasonable expect -- expectation of privacy, and as we discussed another bill. at what point do you think it's ever going to get to a point where we have to say what a reasonable expectation of privacy is, period? because the more and more that things evolve, the more and more i think i have any expectation of privacy, and at some point, will someone say your expectation of privacy is just unknown. >> of course, i -- is unreasonable? >> of course, i believe the committee can use their powers to enforce the fourth amendment and say, yes, a reasonable expectation of privacy includes the following.
9:01pm
>> mr. calabrese, you talked about the fact that we have tort laws and others things denying government access. is i watched the news this morning there's an incident new york where a guy took pictures of people in an adjacent building, didn't capture their face but caught very intimate moments, and those pictures are now in a gallery selling for $8,000. subjects are upset and lawyers say there's no recourse for them. and i guess it's that sort of thing that concerns me in terms of, if we get to drones, how do we reconcile that? >> they are very difficult questions. but they're very difficult questions both because they are potential real invasions and also because of the powerful need to protect the first amendment. i think that peeping tom laws would deal with a dronene's win.
9:02pm
across the building, but with the powerful camera, it's a harder question. the first amendment protects our right to gather information for really important reasons. revving lating how government operates, giving people the ability to talk about what is going on in their lives, share information. obvious need to help -- to protect the press. so we're going to have to balance those. we do think there's a lot of law in this area. so i think we're going to have to tread carefully in regard to the first amendment and i think there are more existing protocols that control around first-amendment related activity for private use than for the fourth amendment space and government use. >> we talked a little bit about the drones and the fact that they have the capability of license plate reader. my police chief is excited about the fact he isense
9:03pm
plate readers on every stoplight. so, at what point do you think we get to -- do you think police now would need some authorization to record and store the data from license plate readers. for example, if you you have a burglary spree, go back and see if there's any car that went through the red light close to any home. can they just store that information? >> i believe there's a reason that we have license plate readers. i believe for example, looking for stolen cars is a perfectly appropriate reason to have a license plate reader. i believe that information should be destroyed at the end of the shift, once the purpose you gather it it for is no longer operative. and i do believe that is because if we don't do that, we're going to live in a society where we have mass surveillance. we live in a world of records
9:04pm
now. everything we do generates a record. so if we're going to say let's just keep it just in case, our entire lives will we out there to be investigated anytime someone wants to poke through the records. >> that's what i was worried about. the just in case. anyone else want to comment on that? >> i guess i'll just add that while i fully am. the -- am sympathetic to these concerns, there's gray area here. it's difficult. if as mr. calabrese suggested these records were destroyed at the end of the shift, spouse there was a kidnapping that wasn't reported until 48 hours afterred it happened. don't think anyone would deem it positive if we intentionally destroyed information that might lead us to solve that. i don't have the perfect answer but these are hard questions. >> thank you, mr. chairman, i yield bag. >> gentleman from south carolina, mr. .
9:05pm
>> thank you, mr. chairman justice alito said new technology may provide increased security at the expense of privacy and many people might find the tradeoff worthwhile. how do we know if people find the tradeoff worthwhile and who gets to make that decision? >> can i comment on that? >> sure. >> that's a catchy statement. the problem if -- >> it's not my statement. >> i know it's not yours. i understand that. my concern with that statement is that because society would -- or members of society would be willing to make that tradeoff, the individual will be the one who suffers the harm, and i think again that's the job of -- i assume that's one of the reasons why this committee is holding these hearings, is to get our view. i agree with congressman richmond that this body should make a determination of that because if it's just a matter
9:06pm
of, well, what society would prefer or what tradeoffs society would be willing to make, individuals are going to be the ones who suffer. >> so, if i remember law correctly, the bill of rights sets the minimum and if states or this entity perhaps wanted to have a more arduous view of one of the amendments, leak the fourth amendment, we could do so? >> i would just caution because the juris prudence under city of burning vs. woods, as i'm sure members of the committee understand, does not lend itself to congress going beyond what the supreme court has done. that said, however, -- >> i thought the constitution allowed congress to in some instances set the jurisdiction of the courts. >> but under section 5, the court has been somewhat restrictive, the city of burney is the main case and recent
9:07pm
precedence since then, and it will be interesting to see what they do with the case -- shelby county case. but the court has invalidated several congressional statutes where congress imposed on states restrictions which the court found unconstitutional. >> how does the expenditure of manpower or woman power impact a fourth amendment analysis? i cook -- i can see an analysis where if you had to invest detectives or line officers in surveillance, that's one analysis, and it would be a different analysis than just having a compute deer it. am -- computer do it. aim dreaming up that the resources would be part -- jason, my friend, love him to death. he has a bill dealing with gps tracking, and part of the analysis i think is, at least when you're having a person doing it, you're investing time,
9:08pm
investing resources. that's a different analysis than just having some device do it. so how does that play into it? >> i know of no supreme court case in which the court has said how much resources or the degree of resources invested makes any difference in the fourth amendment question. >> i think there is, but you guys are the experts. the gentleman beside you is shaking his head, probably to agree with you but not me. >> i think aagree with you, congressman, i think the appropriate place for us to calibrate these expectations is in the legislature rather than hitting judges write things up. this body is in the best position to know what you're con constitute opportunities expect with regard to privacy and if we want to control the types of surveillance, be it gps or geo location, then congress can pass loss to require a warrant before getting that rather than allowing it to be obtained from a subpoena. i think that's appropriate. >> do all of you agree that technology can impact the -- whether or not a search is
9:09pm
considered reasonable? >> i think i can at least partially answer that. the supreme court has ruled that if the government uses large team of agents to follow somebody around, that is not a violation of the fourth amendment, whereas the supreme court in the jones majority is on record leaving open the question of performing that same tracking with technology, may be a violation over the fourth amendment. and justice alito and four other justices believe it is. >> do you agree? i know i'm almost out of time -- that technology impacts our reasonable expectation of privacy and it's a scale that changes from culture or generation to generation? >> i think to some extent we are all far more comfortable with the concept of photography than people were in the late 1800s when i became possible to
9:10pm
capture an accurate image of somebody at will. so technology does impact our views of privacy cut doesn't mean we don't have privacy. >> i agree technology affects our forthamendment. >> the gentleman practice california, mr. chu. >> i'd like to ask mr. calabrese boot the issue of storage of data and its implications for privacy. we know that local police departments are applying to obtain permits from the faa to use drones for law enforcement purposes and i understand that there's some potential that a large amount of data could be collected by drones and stored for a very long period of time. i'm concerned that limitless data collection can pose a threat to americans' privacy. can you tell us what types of data these drones can collect, and if those law enforcement agencies who acquire drones have data minimization policies in
9:11pm
place. >> those are all incredibly good questions, congresswoman, that don't necessarily have clear answers at this point. let me try to sketch a few of the parameters for you. i think that absolutely the widespread collection of detailed information at the hd camera level video, can create huge privacy implications. it changes the way we consider public space. don't consider ourself to be recorded in public. we may be in puck but mott not preserved ore time. and we can apply face wreck police to -- recognition to that video and we can zoom in or examine particular things we might not have noted at the time. in terms of dat retention policy we think those are best practices. every police department should limit the amount of collection for particular purposes and discard it after no longed needed. whether that's happening now, i think it's tough to say on a local level, a particular data collection practice.
9:12pm
we hope it will be something the faa requires and all local law enforcement does. >> do you think we should require that agencies who use drones have some sort of data minimization policy in place and what kind of policy would be best in terms of considering civilian drone usage. >> i believe the dat minimization policy is vital. and it's grounded by the other reinforces collection. you put a drone up for a particular reason. once that reason is expired, you have examined the person's, searched the person or followed the person you're looking into, the case is over you no longer need it, discard the data. if you don't do any mass surveillance, you won't have to worry about keeping dat for long periods of time. >> we have to update many of our other federal laws to deal with electronic communications. what can we learn from our experiences in dealing with other technologies when it comes to protecting individual privacy? >> well, i think that we have
9:13pm
powerful frameworks in place now. certainly the privacy act in itself has all the principles we believe would apply here. they have to -- has to have some exceptions but also is a powerful framework. clearly we don't want to discard the protection office the wire tap act against listening to people's communications. those have to remain in place. i think what we can learn is to articulate, i hope, some of the thing wes believe should be in any bill, which use limitations, collection only for particular purpose, not converting it to other purposes, discarding it when it's done, notifying people about when their information is being collected and why, and giving them input. >> okay, mr. villasenor i'd like to focus on the positive use of drones. as a representative from southern california we face
9:14pm
dangerous and costly wildfires each year and could benefit from additional tools to fight the fair 'the station fire in the angeles national forest killed two firefighters firefighters ad 160,000-acres and it was the largest wildfire in the modern history of l.a. county. is the faa modernization act helping to accelerate the production of firefighting prevention drones so local firefighters can have these tools in the near future? there is any barriers that warrant any congressional review? >> i think the faa is very well aware of the importance of applications like firefighting and the faa is not itself involved in the production of the unmanned aircraft bought is working diligencely and hard on the regulations that are enabling the uses such as firefighting that nobody in this room, i'm sure, finds objectionable in the least. so that's moving apace quite well. >> thank you. i yield. >> thank you very much.
9:15pm
>> chairwoman is recognized for 15 seconds. >> temperature, mr. calabrese. i have a simple question. what is the opportunity for racial profiling and how dangerous is that with the utilization of drones? >> we certainly have seen racial profiling in the use of video cameras. seems logical to believe it might bev applied here. >> the gentleman woman's time is expired. the gentleman from texas. mr. gohmert. >> thank you, mr. chairman. i'd like to follow up on
9:16pm
>> got a picture out and it was the most -- a photograph of -- been on more front pages of publications than any other. on the other hand, if he took that same camera and point it it in someone's window from a long distance, then you would get an issue. so obviously technology makes a difference and it seems we do get into some intent issues. but i'm curious, mr. calabrese, you say there's a lot of lot in this area and i wasn't sure which area you were talking about. i'm curious if congress went about setting what we believed -- i think there's a lot of room for agreement on both sides. i appreciated ms. bass and ms. chu's questions and mr. richmond's questions. i think we agree on a great deal in this area. so, if we came to an agreement on what we in congress believed was an profit, reasonable
9:17pm
expectation of privacy, are you guys aware of a law that would create a problem for us setting such an expectation -- reasonable expectation of privacy? >> no, i don't believe. so i believe you have a very powerful piece of legislation in front of you right now, hr637 and that's a very good beginning on setting the parameters for how drones should be used. i think that's a great place to start. just to answer your question in terms of the areas where there's existing law, i was talking about private use. >> is anybody aware of laws that would be adverse to us trying to set a reasonable expectation of privacy? >> i'm not aware of that. but i would just urge some caution here, congressman, in that the the courts have had decades to try to define reasonable expectation --
9:18pm
>> i understand. it's a difficult area. >> you might be better served with focusing on the government conduct you want to control, defining terms like search and public place and whatnot, and controlling -- focusing your legislation there rather than trying to define privacy. a reasonable expectation in privacy is very different than somewhere else. >> but if you -- and ms. bass was pointing out, she has a lot of paparazzi in east texas we don't have that much paparazzi, but her concern is my concern. not just public government entities but if you have a nosey neighbor that has a telescope and points it to your backyard or inside your house instead of skyward, there ought to be some point that you can expect privacy. right? >> i think that the -- focus on the conduct we want to control. it would be the -- either the
9:19pm
collection of that information bay private party or the subsequent use of that information. and so if i'm -- sometimes you walk down the street? georgetown and people leave their blinds open and young see into the houses. that's not something that -- they might feel their privacy is violated but it's not something we would -- start snapping photos and using them, then maybe the use of that information into a home is the thing we want to control. >> congressman, there is one example of this in the mid-0s -- mid-7'ss united states verse miller, the court says we doped have a reasonable expectation of privacy with respect to our banking records. congress passed legislation which effectively reversed that ruling and gave individuals a more privacy -- >> good point. let me ask this quick. anybody aware of laws that prohibit you shooting down a drone in an area in which you're allowed to shoot in i lad this
9:20pm
-- i had this question come up. if it's over your air space and it's a home, a private, not a government drone -- >> i would think it would be a very bad idea. >> i'm just asking about laws. a gal from georgia said we need at least 50 rounds because that what it takes to bring down a drone. >> if they did that, gee charged -- >> i understand that. can you shoot drown a drone over your property? >> farm the gentleman's time is expired. >> i appreciate that, mr. chairman, since your normally allow people to answer questions that were already asked. >> okay. all member s hoff the subcommittee either having used or yielded their time, those who have been appreciation without objection, the subcommittee stands adjourned.
9:21pm
>> the question is, why take the risks? is it for fun? for adventure? no. for the money? there are easier ways to make a living than this. we do it to understand the world and how it changes. the world tends to move like the earth's plates. tensions build and then suddenly they snap with violent political change, and we go to where the cracks for see how the plates are fitting together. we do it to show tv pundits and studio job yes they're usually wrong. we do it because we decided this is what we want to do with our
9:22pm
slice of time on this planet. >> recent elections in pakistan mark the first democratic transfer of power since the country's independence in 1947. sharif of the pakistan muslim league has been elected as the next putt.
9:23pm
-- the next president. this is just under two hours. >> good morning, everyone. director of the center of the atlantic council and on behalf of my colleagues and our president, i'd like to welcome alloff you. we waited roughly a week to talk about the very important event in south asia, the elections in pakistan, and we are going to be focusing on pakistan for the next few weeks because there is so much happening that affects pakistan, and what happens in pakistan affects the region. so just wanted to let you know that on monday afternoon, we'll be having another session on pakistan, looking at economics and depth and h the usaid sees
9:24pm
the changing circumstances in pakistan at opportunities to move things forward. and then on the 3rd of june, we're delighted to be hosting a well-known england member of parliament, who in his prior existence was a diploma in pakistan, and will be talking about the search for regional stability. i'm delighted that today we have three excellent persons who are going to help us understand where we go. now, particularly given the mountain of challenges that pakistan faces, internally and externally, and let me just quickly introduce them. then i'm going to invite each
9:25pm
one of them to speak briefly, and then we'll have a discussion and bring all of you into the discussion. if all goes well we'll end at 11:30. first of all, ambassador lodhi is joining us from pakistan via skype. welcome. ambassador lodhi is well-known to washington audience. she served twice as ambassador at a very critical juncture in the u.s.-pakistan relationship, and he has also been a very active observer of the pakistan political and economic scene at home and participates in a number of dialogues, and writes regularly on events inside pakistan. so you can see her commentary. then we have riaz khan. it's important to note that he has been ambassador to china,
9:26pm
pakistan, and then the first foreign secretary. he was foreign secretary under the government of general musharraf and continued under the pakistan people government, until they decided they would advise against taking the case to the u.n. maybe he has different explanation for it but that's the public discourse on him. he has been very active also in a number of dialogues, including ones that our center is involved in, on military to military dialogue, so we are delighted that he is in washington and he will be with us. and then we have our own mohsin
9:27pm
khan. and he has worked very closely with pakistan, particularly with the u.s. government, on a number of issues, advising them on very specific issues and asked their advice, but now he is working at the atlantic council. we thought it would be critical to take a look at the economical challenges facing pakistan. so, let me just say. on my part, that a lot has been said about the elections. a lot of the conventional wisdom that this is a watershed election, that it's going to change everything, and in my permanent view it's very important to start election. the turnout was historic proportions, the 1970 election was the last so-called free and fair and competitive elections in pakistan. the end result of that election we know wasn't very good for
9:28pm
pakistan. it left half the country. but this time things are different, and so there's an opportunity perhaps to build on this. however, some interesting things come to light. one, the punjab are going to be clearly in the control of the same party and this is not happened in a very long time. so it's a great opportunity to work together, because the punjab can be an engine of economic growth for pakistan. the other resource is that the pakistan people, surprisingly -- it is now largely confined to being a party -- and then the upstart, the part -- the party managed to surprise everyone by taking a large number of seats and in the urban areas.
9:29pm
so, there is some galvanizing and new entrants into pakistani politics, which is likely to have an effect as we go forward. the shape of the new government is still being decided. relationships with neighbors are obviously going to be on the agenda. and we look forward to covering all of these. one very interesting point is that despite all the talk of the modernization of pakistan, if you look at the numbers, the islamic parties are still hovererring around 4.5, 4.8% of the total work that they garner. ...
9:30pm
thank you. >> i can't see you. i presume you see me. rsm on some outside -- islamabad and i admit to karachi, to pakistan's organizing, so i
9:31pm
manage to see two large cities. and i can't tell you what excitement we saw and i was obviously side-by-side you enter together. as you said, a higher turnout of 60% like the 1970 justifies to that fact that people are galvanizing the station. they did that so pakistan defines the trips for militants and really showing they were not going to be the board and station by the violence we saw and this is actually also pakistan's bloodiest election in terms of what happened before. pakistan voted for both
9:32pm
coin change. voters came out to rip for experienced hands, which is nawaz sharif and his party, the muslim league. they thought that the country confronted unprecedented challenges and they are going to stick to the familiar expedient set of hands. but they're further for change for the entire political landscape. we see how enduring the change will be, but they changed it by reject being all the incumbent parties other than nawaz sharif. the final ruling party would crumble from 30% in the election, 15%.
9:33pm
they're repeating in place and was better because as you said it has its vision of stronghold they are marginalized more than the enhanced. also not critical inserted another faction to nawaz sharif. they saw the world crumble in 2008 to 3% in this election. clearly where mr. sharif succeeded within the campaign and also most important and consolidating them that islam elections had disintegrated and
9:34pm
away among several factions. whether it is surprising and the answer to that is yes and no. they were not surprising because the general expectation are showing few people expected to do better, but nobody expected the party to rant. the surprise. receive for his party. even they did not expect such a clean sweep and he is now close to getting not just a majority, but the independence and the help of many people who have the option within three days of joining the other party. he could end up a two thirds majority in pakistan's national
9:35pm
parliament. so this is based and predicated on a landslide in the punjab, where he won 116 out of 148 days. in the provincial legislature, erd has a two thirds majority in the legislature. so the question is, why was this is is so strong? it is clearly in favor of nawaz sharif, so why this is so strong? what i said before, i think his main message that i know how to set the economy rate a think whiskey. so you know the appeal of personality as they are, but so was the message repeated throughout the election. and the only one who knows how to do with the economy. he kept you don't want to test
9:36pm
right now. you want experienced hands. you also have a situation that is strong candidates, which are influentials or whatever you want to call it. so they had a bunch of strong candidates in pakistan, elections are as much as candidates locally, like in any other country politics is local. so the election is as much about candidate says it is a party. the other question is why did the party disappointed supporters? the answer to that is this a themselves very unrealistic target. they were taken on an entrenched bankof mr. sharif, which he
9:37pm
successfully activated and galvanized by campaigner he was undeterred and everyone receiving and now they say punjab campaign was largely violence. so sharif is able to present himself as the only credible alternative to the previous ruling party. but i think we also have to recognize what he did was to bring into the political process a whole bunch of people in pakistan's centers who had previously some politics. this is the educated middle-class women and of course as you said yourself, the youth board. there's no question it has also been to nawaz sharif who is quick and adapting his campaign strategy and he was also making to young voters.
9:38pm
so sort of approach and say and i had the experience, but promising voters that he can take pakistan out of its economic challenge because if there's one issue that dominated the election, it was the economy and the fact in the last five years pakistanis have gone through unprecedented economic hardship, particularly the energy crisis and shortages. so i think here we are. we have put in your introduction in the next 10 days to handing over from one elected government to another elected government, something that never achieved. i have to say this is not the last time they completed his term. it's the second time in every time it's the people's party
9:39pm
because in 1971, he did complete the one of the elections in 1977. but never sought a peaceful transfer, so this is the first of pakistan and it's an achievement, which is sitting in the media of this network and i can't take the bus in terms of how pakistanis had really crossed and felt really good about themselves. but then here are the challenges. i think first is that we've seen a sharply regionalize.com. so the strain placed in punjab, although he has support and two of the other three provinces. at least two of the for-profit is run by political parties are different from the one at the center means that sharif will have to adopt a common data and
9:40pm
flexible approach in handling pakistan fundamental reality. plus, he also has to contend with the senate, which is an upper house. the senate is still controlled by the whole ruling party, the people's party so sharif it has to do with the senate late governs pakistan. the mandate he has received insures the voters of pakistan wants somebody to just get on and get the country moving again and get on with governments. voters realize the challenges imposing a complex and what they say to sharif is we are giving you the political means now to take the top positions on security and economic challenges, which i know it's much better equipped to deal with. but this is where we are. the challenges that are clearly tough decision because there is
9:41pm
no shortcut to complex challenges except the top positions. but this enormous majority has the assurance of one stability government and the largest province that also gives him the political confidence to go to take some of these tough decisions on both the economy and security firm. after his election victory had been very much along the lines that when asked what are your priorities, he said the economy, the economy and the economy. he also said counterterrorism ingenuous militant they would also also be very important, its foundation. it's a necessary condition to achieve the kind of economic role that pakistan clearly needs. foreign policy notes and has
9:42pm
been reciprocated by india, for example, when he talked about wanting to continue the process that he said he once started with the architect of localization with india in 1999. in the mid-90s, plus i think he's also sent a strong signal that he wants to work with the united states and has worked with the u.s. in the past year tenure bill clinton very well. he's named all the statements, which indicate we may be seen barch from the past, but also contracts a different pakistan in a very different world. so you know, there's a lot he have to do at the central level firm was 15, 16 years. it's a long time. the world has changed and so is pakistan. where he is positioned if he's
9:43pm
got the political mandate. he's got the political strength. he does not political groups within parliament and the system then that he does not want with the blackmailing part of smaller parties. some pain, an expression i learned in the united states, be careful what you wish for. >> thank you very much for setting the scene. a economy, economy, economy. security, security, security may be another mantra closely tied to visual relationships and that is what we will pull together. i will request ambassador riaz mohammad khan to shed light on some of the foreign policy standards that he thinks the
9:44pm
merged after the election results. >> thank you very much for inviting me. they think he is party presented a good analysis of the selections, which are very important milestone. the turnout around 60% is quite encouraging in terms of people's participation in politics for the elections is generated. she also emphasized it was economy, which people thought that nawaz sharif was experienced in his party was more experienced they gave him
9:45pm
the advantage. several elections in the past, pakistan. the selections also present other experience we cannot be over a domestic, but nonetheless, the point is these collections and the results offer hope. i -underscore sum up what i would say of the advantage is. the first thing it's perhaps for the first time the public perception performance if one were to look forward to pti and
9:46pm
ppp and pml-n and pml-n had released when jan. pta promise for the future because they did not have that experience. ppp on the other hand was basically invoking the legacy, the sacrifices this is the first time was the performance, which figured the voters choice. when it punish ppp for the performance of corruption they lost their both -- guy on me and nawaz sharif. the general impression is pti comes to the world bank of ppp,
9:47pm
not the world bank they were not able to do kurds pml-n, nawaz sharif's party. all the parties now pay more attention to the need to show performance, to show results and be sensitive to the needs like, for example was not. one of the glaring examples is the power shortages. they did nothing. we have yet to see that this is perhaps in my view the most positive aspect of the 2013 elections. the fact that pml-n won by a comfortable margin will allow nawaz sharif to confirm without the demands of coalition parties and maneuvering the pakistani
9:48pm
politics and perhaps is unavoidable when you have a situation of hung parliament. this is not a hung parliament. he would not be blackmailed by smaller parties in order to retain his majority. against the province other than punjab and will continue to rule. he will focus in earnest is beset in the country and this probably is the expectation of the public that he's going to address the enormous problems in the economic field. if he fails to show results, the risk is that his party will also suffer the fate of ppp next time
9:49pm
and perhaps this time -- next time i fails to be the pti especially if it's able to show what is expected to have the provision government. third, nawaz sharif's personality resonates with the conservative religious oriented constituencies in pakistan, but religious constituencies,. this can be an advantage in doing with the extremist groups and giving them away from violence, especially in the punjab. but in dealing with the solomon, he must remain clear with regard to acceptance of the writ and
9:50pm
then the president in the tribal areas. if the extremists in the punjab are real, the suffrage in the tribal areas would find the china of an important source of support for them in the shape of what usually is known as punjab taliban. the next point in this regard i would make is the selections have taken place at a time in which army has contributed sobering experience and perhaps a reevaluation of military rule under president thayer and president bush are as. there's a clear sense that pakistan's problems are quite content to bowl, complex and not to be left to be perhaps as to
9:51pm
look at the devious and correct, but soft ways that the politicians. but they cannot be addressed frankly through military officials, which i think the sheriff had to do. on the other hand, nawaz sharif himself has been chastised by his own experience over the last 20, 30 years and understands the risk of the temptation. pakistan's problems are enormous. they are obvious challenges as the topic suggests. but they are not impossible. before i comment on them, i'll make one of the observation.
9:52pm
nawaz sharif must be very cautious amongst politics, against exacerbating sectarian tensions in the country, religious sentiments, alienating ppp and mqm and the sentiment. manipulating provincial politics where there is the potential to do so. as in the past, such politics will be. one can hope that instead of allowing this kind of manipulation, which in pakistan recall the political alliances, if better, this current time power prime minister said six will be disposed to acting with
9:53pm
prudence, awfulness and will focus on a practical agent to refocus credentials as a problem solver, the man in the economy. the problems can be divided in four categories in my view. first, security, law and order, extremists, virtual rebellion by taliban and thought and insurgencies in baluchistan and sectarian officials. the evidently soft attitude and his willingness to negotiate with extremists given a chance to restrain. as i said earlier, he must remain firm on there except dean the government, except in the presence of the army and fought.
9:54pm
they must be on these elements, even in the
9:55pm
9:56pm
as for the -- [inaudible] certain aspect of politics and also you have to, you know, that
9:57pm
both in the army and in the -- there would be a change -- [inaudible] the current problem, of course, is -- [inaudible] with a job of energy and systemic problems which can dwell on, but that and that -- [inaudible] which was a waste of time.
9:58pm
a projects which can generate i think he has already made -- [inaudible] desire to normalize with indian why and parentally he made the statements that we would not allow one way of -- [inaudible] this was an important thing to india. the military sense on india i think they are accelerated. i think it is a better place to work on improvement of tradition with india than earlier leaders, and to address issues with india which have so far alluded to problems. again, the united states has
9:59pm
stated willingness to work and also underscored the fact that he has been -- [inaudible] relating to a palestinian relating to the question of mujahedeen and in fact -- [inaudible] thing they need to be worked out. there has to be some kind of coordination between the united and palestinian. on palestinian, i think he have to resist temptation of playing any ambition peacemaking role. pakistan, in my view, is little by being proactive in the palestinian. -- [inaudible] taliban leadership has been to be established by turning energy to a base -- [inaudible]
10:00pm
they would also be some challenges with with the art to pakistan and india relationship. india and iran at the same time. finally, let me say i'm borrowing an analogy. pakistan's history of politics has been quite -- [inaudible] hopefully this time it will be less. thank you. [applause] thank you very much. you are incorrect in your statement of the word, but speaking of it we are awaiting for discussion of the issue that he put front and center, and that is the identifying as critical to anything that happens in pakistan after these elections. so to ask him to talk bout the
10:01pm
economic challenges. >> thank you very much. thank you for inviting me. it's great to be here. yeah. so basically it's the economy, it's the economy, it's the economy. it's the campaign and slogan of him. he was the man who could fix it. he knew the economy, he could fix it. that's a big issue. the economy is tough priority for the country. what they inherited is an economy in poor shape relatively to to be leading international reserves, day by day. i'll come back to that issue.
10:02pm
rising unemployment, et. cetera. you can go on. there's a lit any of problems. so the new government has inherited a economy that in pretty poor shape. the argument is that they have a experience people on their team, experienced with the economic of the country, and, you know, they are the people who put two and two together and said it would be the minister of finance. that's still up in the air as to whether he would be. he may well turn out to be the farmer. the issue is going on. during the campaign pln and the economic team particularly people like -- [inaudible] et. cetera identified the long-term structure of issues. and those are well known.
10:03pm
there are long-term structure economic problems in the country. you know, how to get investment going for the long run to raise potential growth rate is essential. there's a problem of infrastructure. infrastructure development is needed. education, you have to have, you know, people labor force and right set of skills that is in demand by the private sector. in demand by modern industry and so on. new industry. innovations, moving away from the standard inindustry of text tile. that's another issue. but let me say these are -- long-term structure issues. before the people -- [inaudible] and have been continued. they will have -- [inaudible] what are the immediate issues? i would like to focus my comments here this morning on
10:04pm
they need the short term issues that the government the new government on day one will have to start wondering about. and those are three. one, fiscal public finances. secondly related to the relationship -- [inaudible] energy. everyone talks about energy. you talk about imminent reform. people talk about that. so let start with the first one. the first issue that is, the fiscal problems have continued to grow in pakistan over the last few years, and under this government, the government this
10:05pm
is the lost ethe budget deficits expected to be 4.7% of gdp. it was last year too and the year before. it seems to be a fixed number that minister of finance like to work with. but the budget deficit this year is going to turn around 9 percent of gdp. it's twice what they predicted. bad enough that the fiscal deficit is so large. worse still is how it's financed. how it's being financed. and essentially it's being financed by borrowing from the banks. what there is an central bank -- the central bank itself cannot finance the government. at the end of every quarter it has to have a zero balance. so what the central bank was
10:06pm
innovative in doing was it -- the central bank bumps liquidity to the system and the banks go ahead guy. the government treasury rules. this, if you like, is all the printing money. and therefore you see a nation rising. it's no prize that it's rising. the fact that you are losing result, it's no surprise. if you are printing money, you are going to lose and have inflation. that's what happened. they have to get a handle on the public finances. how are they going to get a handle on the public finances? the structure of public finances in pakistan is really bad. for example, government revenues are about 13% of gdp. this is roughly half, if you like with, of the neighbors in the region.
10:07pm
they have very little coming in. they aren't that high either. they are 9 percentage points higher. but the revenue are serious issues. on the revenue side what is going happen? what do they need to do? well, basically everyone says taxes, taxes, tax reforms. pay taxes, get the tax rates up. -- tax revenue up. here i would have said that with this government, there's going to be a sort of tussle going on with the new government. on the one hand, there are people like -- who understand the issue of taxes. and i think the problem with a stable, strong majority government -- i'm sorry. the advantage of a stable strong majority government is that the vat -- value add tax considered and proposed by the peoples'
10:08pm
party couldn't push it through due to the opposition which threatened to leave the coalition if in fact this tax was developed. that's not an issue anymore. but even so at that time unfortunately calls for it in the senate. i'm not sure -- [inaudible] the other problem is if you are a poor business, and you are very poor in the private sector, you are reluctant to raise taxes on income taxes and corporate taxes. so the question to me that would ask where are the revenue going to come from? they have to come from somebody. they will be taken, i'm sure. on the expenditure side, there's another problem, a serious problem. most serious problem on the expenditure side is not, you know, frivolous expenditure. the government doesn'tend
10:09pm
that much money. yms 22% of gdp is not a big number. the trouble that goes -- that are really going down the drain. here i think one can be optimistic, the government will try to take action on the state enterprise. state-owned enterprises. right now roughly 2% of gdp. 400 billion is are the losses of state enterprises. state enterprises, by the way, are pakistan international, railways and so on and so forth. there is a whole list of them. there are two advantages, i think the government can do something about the state-owned enterprise. and they want to. for example, they don't, oppose to privatization. and i think that they may well turn around and privatetize these companies. they're not -- filly for
10:10pm
privatization. and not constrainted because, you know, the state-owned enterprises have been used in the past five years by the government as a vehicle of patronage and private. many of the people have been employed in the enterprises. so -- you are not our people. you can fire them. the problem i think there would be the judiciary. and it's judiciary is a serious constraint on the privatization act. we'll see how it can handle that. so that's basically on the fiscal side. that they have to do something. energy reforms. everyone talks about energy, energy, energy. it's true. it's serious issue. let me just say -- people often say this is not a capacity problem. this is a govern mans problem or this is a financial problem. there is a capacity problem. the fact of the matter is that
10:11pm
-- working capacity. in stored capacity impact is 15,000 megawatts. that's in strong capacity. peak demand is 20,000. so you a gap of 5,000 anyway. there's a capacity form which will have to be another. it's not just govern mans and get away with it. some physical has to be -- [inaudible] the biggest problem that creates why in fact get 15,000 megawatts and the only -- women, that becomes govern mans. that then becomes financial. these are the sort of things that come in why aren't you producing at the level you could
10:12pm
produce? it's peek demand but at the level you could be producing. and here we come to a very nice term that i have -- [inaudible] it's already -- [inaudible] how much is it? this year it will be 800 billion. that's close to 5% of gdp. and that's what the company is paying. the government is not paying. the company isn't just -- [inaudible] ultimately this is has to be addressed. this issue of circular debt. and i think there it is financial issue. how do you address it? what the government has done in the past, i thought was a mistake which was basically take on the circle of death eights
10:13pm
and convert to a government debt. but, i mean, the debt rises. the debt is debt. it's debt. and then you don't do anything about the next year when it will rise again. so it's just a one thing. to further more for economists it creates a problem on the part of the company. if somebody is -- [inaudible] and take over the debt from you. they'll do it again. because your debt will be taken. the focus in pakistan and by anyone on the energy crisis has been impact of shedding on -- [inaudible] there's no electricity in the -- [inaudible] when it's 120 degrees. everyone focuses on that. and quite frankly it's very -- i'm sure saying that i'm going solve the energy problem and would solve the issue of oil
10:14pm
shedding got him quite a few votes. people are voting for him. but to me, i think that's a big problem for them. a bigger problem is the impact of energy shortages of the industry in the country. most of the big industry in pakistan are operating around 50 to 60% capacity. because they cannot get the electricity to operate at full capacity. people say we must grow by increasing investment. and you must grow -- you must have investment and we'll grow. in the long run, absolutely true. in the short run, which is what i'm concerned with here, you can -- you can get industry operating at full capacity and you will grow at 6 or 7 percent. with the same capital start you had in industry, five years ago, you were growing
10:15pm
so you don't really need -- this is a constraint the energy escalated constraint. providing sufficient energy to industry. financial changes through changes in the management of the companies, et. cetera. we'll have to be -- [inaudible] this is a physical capacity issue we're taking awhile to do, but why not try to at least get to your maximum capacity in the country? so need a jump in growth in that way. i think it will be something that the pln would love to see. i think -- [inaudible] the fallen change e reserve at the state welcome of pakistan
10:16pm
are down to $7 billion. they were $15 billion from roughly two years ago. so, you know, a significant lead offing reserve. why is it happening? when a country said that we are operating flexible exchange rate, what in the limit in the -- [inaudible] flexible exchange rate will make it clear that you won't lose any. you don't have to -- let the exchange rate go. well, there is a fear of a evaluation that has been continuously in the country. it we let the exchange rate go free. we can't have that. it will be bad for the government. the central bank has done some very invast inagain use things to try to prop up the -- they
10:17pm
have done other things. they have done operated in full marnght with commercial banks. and essentially -- [inaudible] they will raise currently swap with china. and the people's bank of china. currency swap with the central bank of turkey. a lot of innovative things to prove to keep the reserves at some level and not at the -- [inaudible] what will this government do? will it let the rate move? if may have to. doing it in the first few months of the first hundred days might be the answer.
10:18pm
right now the rate is roughly at 97. 100 is the [inaudible] that's the threshold. you have to see. one of the most things that will have to be discussed immediately i am a problem. that's a question that issue that the government will have to deal with right away. what they first said when in april when the government delegation was here, the imf said to the delegation, yes, we're open to the idea. the u.s. treasury and -- [inaudible] said yes. we deal with a new government. the elected government. we don't have a deal with the caretaker government. they have a deal, they i'm
10:19pm
expected now that serious negotiations will take place. is all of the things that were not done by pakistan during the previous program tax reform, energy reform and so on and so forth. even the exchange rate will become prior actions for a program. and i think, you know, the government will be advised to quickly do those things. to get moving on those things. get the prior actions underway and go ahead and have a program. the program that people are talking about is roughly $5 billion. which if you add in other -- conditions on the imf program, which is another five, that should give you some breathing room for it. of course, other sources of finance. they have very good connections
10:20pm
in saudi arabia and so on and so forth. there may be additional financing coming from those country. we are flush with money. it has to be a at the good handle on the issues before it can really move to a longer term structure issues. i'm sure they'll develop a plan of, you know, vision 20/20. used to be vision 20/10 it's 20/20 now. it's a long-term plan. that's fine. you have to get from here to the long-term and these are the three imrairs, in my view, that are top priority for the government to address. they have to address these issues before they get in to building the new ways. so on and so forth. they are from the future.
10:21pm
and if the government -- [inaudible] jew can turn the situation around in the short run, in the long run issues. thank you. [applause] join me on the sphaij to continue our discussion. [inaudible conversations] [inaudible] [inaudible] [inaudible]
10:22pm
[inaudible] [inaudible] what is it that gives you in term of -- [inaudible] change in the way which -- [inaudible] [inaudible] [inaudible]
10:23pm
[inaudible] [inaudible] >> caller: okay. -- let's go to -- [inaudible] -- [inaudible] but at the same time we have seen it is the rejection of many -- [inaudible] you see the family to -- [inaudible] foreign minister -- [inaudible] we have seen words like the -- [inaudible] footage around -- [inaudible] actually the head of the international party rejected, wiped out of the -- [inaudible]
10:24pm
-- [inaudible] also what is rejected. so i think what we are seeing is, yes, the [inaudible] but also rejection of families that are -- i guess by the -- [inaudible] having done anything for the constituency. whatever words you heard of a famous name is not necessarily sufficient anymore. for success. second i think -- [inaudible] [inaudible]
10:25pm
[inaudible] the right to impose the government and give -- [inaudible] in the performance of -- [inaudible] no, i will not be temped by these sorts of things. and they have a right to do -- [inaudible] the fact that you -- [inaudible] and i think, you know, the deed substitutes -- [inaudible] i have do -- [inaudible] east definitely going to be the finance minister.
10:26pm
i have spoken to him. he's already started work what he needs to do in terms of getting some of the data from the finance ministry. so, you know, he hasn't been named yet. he's, you know, -- [inaudible] and get a grim on the numbers. which i don't know if you want to say something. here are the numbers are very -- [inaudible] finance ministry -- [inaudible] what we have seen in the last several months is -- [inaudible] we have seen them do other things which -- [inaudible]
10:27pm
[inaudible] [inaudible] [inaudible] since you have to go -- at any point if you feel you want to jump in on the ensuing discussion, please do so. [inaudible] pick up on the point you raise about the numbers --
10:28pm
[inaudible] respond to that. [inaudible] >> yes. >> something that i think he said about -- [inaudible] the party has -- [inaudible] why not -- [inaudible] [inaudible] >> has the ministry been fugging numbers? >> i think what i'm saying to
10:29pm
you is . >> to some extent -- including the international institution will fudge the numbers. i don't think that will -- [inaudible] for example the bottom line of fiscal deficit. during the first -- this year including medicaid. they maintain right up until the end a deficit of 4.7. so in that sense, they can say -- without a set of numbers they are stuck by them. the numbers are wrong. they internally knew that the numbers were wrong, and, you know, people like -- [inaudible]
10:30pm
very publicly said the numbers are wrong. that the government was sticking to the wrong numbers. the true numbers -- so i think that it's -- i don't think there's been any sort of misreporting in the sense of the ministry of finance is sort of -- keeps producing new numbers that are variance of a fact. what they have done is sticking to an old set of budget protections and try to maintain that. when the true numbers are -- [inaudible] they know that. >> thank you. i want to respond to the other comment it's not polarization -- [inaudible] [inaudible] phenomena that you have a party
10:31pm
which had support all across pakistan. secondly, i think -- [inaudible] party has done -- [inaudible] not in one bank like bbb is to the barning -- bank [inaudible] so the example of -- would not to the issue of -- [inaudible] the hope is that the major parties they are a able to develop in case of bbb regain its standing on the provinces and that -- [inaudible] the bank of -- [inaudible]
10:32pm
he has good strong allies. but there's a different case. so it was in that context that he was saying that that the politicses has become somewhat -- [inaudible] it's not the answer. let me answer for everyone's knowledge based on the data that i have. it's actually the single largest party in the religious staff. they have -- [inaudible] the other largest group which is 21 which is others. it's a much larger different groups. and they are -- [inaudible]
10:33pm
they have a representation according to the numbers that we have from the election commission. >> yeah. as i said, -- [inaudible] there's no sense of concept -- [inaudible] nothing wants to come in. go ahead. >> yes. [inaudible] i told you i would raise the question. it's a question that many are asking -- [inaudible] they displaced the people's party. as the country's largest party. they are a force. [inaudible] [inaudible] but, you know, the question that is being asked is whether -- [inaudible] the people's party would pick up
10:34pm
a function -- [inaudible] it's fair to adjust the more organized pakistan. and still -- [inaudible] [inaudible] thing is -- we don't have the answer to a question. it's an interesting question whether this -- [inaudible] that's what it is. there is a -- [inaudible] and that means that first of all, space is open up for a new party. space is also a -- [inaudible] [inaudible] all the -- [inaudible]
10:35pm
and i think the people's party would have -- [inaudible] it's gone somewhere. all they decided to work -- [inaudible] it's interesting. whether it was tactical by people's party or -- [inaudible] -- [inaudible] -- [inaudible] they had -- [inaudible] -- [inaudible]
10:36pm
din city unless you -- [inaudible] that's the moral of the story. -- [inaudible] so to speak. because -- [inaudible] threw a name at them anymore. you see it's a good -- [inaudible] -- [inaudible] >> thank you. we'll try to get as many as we can in the short time. thank you very much. can somebody give us a current break down of seats in the national assembly and how it works. more importantly how do you see
10:37pm
the -- [inaudible] relationship evolving? what is the future as far as you can see for them? you're talking about the three main parties. the numbers i have and may they not be final is 12. the people's party or the ppp as it's called. 31 those are the numbers. the independence -- [inaudible] a lot of them are flocking to the government party. so that is good to give them the -- [inaudible] the election and what the possibilities of are maybe -- [inaudible]
10:38pm
getting in touch with my travel agent. [laughter] >> i think that a couple of statements would be as you said if his party -- because of the party -- [inaudible] becomes the prime minister he will take the -- [inaudible]
10:39pm
please, identify yourself. >> time to bring up a member of the board and executive committee here. i would like to shift a little bit away from the election toits what the results mean and particularly with respect to the book fair -- [inaudible] two or things that came out of the discussion whoever wants to pick up on it. it was makeshift it puts them in a strong position to do a lot of things. secondly, others mentioned the fact there is a possible economic said in effect that the army was perhaps less id logically driven on the --
10:40pm
[inaudible] put words in your mouth and perhaps more practically focused on perhaps as well and internal problems inside pakistan which is a shift we have seen coming. what are the possibilities within -- we have seen the plethora of invitation and happy seption and potential travel. one of the possible with indata you have seen, where could it go? and what can -- what can we expect out of that? >> thank you. -- [inaudible] [inaudible] should not be in the negative
10:41pm
sense which -- [inaudible] age number of steps that have been taken and i cannot see that -- [inaudible] business background he is going -- through [inaudible] one very important step i have seen, we will not allow -- [inaudible] what is -- [inaudible] tb will be cooperating at the certain level and -- the
10:42pm
extremist ways and, et. cetera. -- [inaudible] to india that -- we don't want to spoil our relationship with you. it's something that has to be seen. it's -- [inaudible] then it comes the issue bigger issues. i don't like them. ten so you a history of -- [inaudible] i don't think there will be any sudden developments in the area,
10:43pm
but there would be some movement in terms of -- [inaudible] at least trying to talk about these issue in more serious manner. if so -- [inaudible] so my take is that on trade and other matters, et. cetera, there would be -- [inaudible] there would be no -- [inaudible] the question of it is, again, my favorite question which is not going come about on any time soon. on the other issues, i think -- [inaudible] time to talk about them. not able any time soon because we -- [inaudible] the election phase. and to be able to do something
10:44pm
dramatic prior to elections may not -- [inaudible] there would be certainly a claim of the relationship between them. >> thank you. >> [inaudible conversations] my question is directed to -- [inaudible] alluded very briefly to the judiciary that they might get ant -- ant nationalized industry. i was wondering for you could expand on that, and explain to us me how come the judiciary can interfere with the development of the publicly elected government. [inaudible] what con saint can we have as pakistanys.
10:45pm
i'm a pakistan-american. the nonintervenes between the institution. why not -- [inaudible] well, that's a good question. [laughter] on privatization it's if you like, the -- [inaudible] the issue. what happened and the question is how is private station done is it was done in a transparent manner? was it an inside deal. was it to cheep. too cheap for people? that case is -- [inaudible] we know that and it went further and said privatization that was occurring had to be reversed and the people that had been let go had to be reemployed. now if you have -- if people can
10:46pm
-- [inaudible] and i think that it's something that the government has to tackle because i know that, you know, the party is a party of private business, private sector, and to me there is one way of solving, if you like, i cannot see a solution to pakistan internationality. there is no solution that, you know, -- if, frx, i give you an example. why not sell this company, sell the company. and bids being made, believe it or not. [inaudible] i think i see -- it's going to be a hard sell and hopefully,
10:47pm
you know, -- [inaudible] discover the judiciary that is doing the privatization in the right away in a -- [inaudible] and has no correction and blay, blay . >> [inaudible] >> go ahead. >> yeah. i think -- [inaudible] more specifically in term of question asked. first of all, i think [inaudible] i have no doubt in my mind. the size of the victory of the political mandate very different for the judiciary to start -- [inaudible] that is inconsistent with the mandate received. [inaudible] second thing, i think we saw -- [inaudible]
10:48pm
because govern mans -- [inaudible] transparency or -- [inaudible] i think the judiciary would have no incentive. the one painted in the last five years was because judiciary -- [inaudible] and found that -- [inaudible] [inaudible] and want to ask -- [inaudible] -- [inaudible] my own sense is mississippi n. there's no reason for that.
10:49pm
[inaudible] give a fresh impetus to the new relationship. the election in india really supposes limits on -- [inaudible] simple in terms of spectacular -- [inaudible] -- [inaudible] the urgent means that pakistan has to have a conversation with india. or, you know, each country's -- [inaudible] we cannot leave it to chance anymore. transition upon us. each country is -- [inaudible] and the -- [inaudible] anybody including the region and
10:50pm
all of that stuff. so i hope to be able to have a conversation with them on -- [inaudible] going to be a 1201 and and assurances we can give each other end up not -- the situation 1990's situation. there is an understanding db [inaudible] each country doesn't wish to go back to the bad old day of the 1990s. so i think that creates -- [inaudible]
10:51pm
[inaudible] and perhaps lead to a conversation -- [inaudible] >> thank you. just a quick one for -- [inaudible] a brief comment. i think university [inaudible] to go home privatization of things like -- [inaudible] because it's going to -- [inaudible] [inaudible] the important thing is that -- [inaudible] -- [inaudible] and that will start to give impetus -- [inaudible] >> thank you. >> a question here. right down there.
10:52pm
mu comment and a question is about -- [inaudible] because i think t important. that's the most struggled province right now. looking a the past election results, you are right about it. everybody joined bbb with one benefit left in the opposition. it's interesting that a party has most of the -- [inaudible] i think it's a first time that they have really taken the northern part of it and people have shifted their -- [inaudible] and the third party is extremely important. we can begin to focus on that. it's the national party with six and maybe one more seat. it's the only party that does not represent the triable leadership that triable lords. and comes from a middle class and has risen from the south
10:53pm
very quotely. and it has a little vision among them like senator -- dr. malik. and they have gradually gained grounds without being noticed. the south has been rejected but has really grown in term of education and understanding. is actually being considered for the -- [inaudible] important new development and -- [inaudible] is considering three names. [inaudible] and one from the triable -- [inaudible] from his old party. [inaudible] if somebody like that from the middle class gets selected -- [inaudible] i think it really be a game changer for them. they are in touch with -- [inaudible] democratic front. and just a new kind of politics. so i want to point out any have f you have them. >> it's a comment. just move on to the other questions.
10:54pm
a question we have a question here and come to the front. thank you. [inaudible] i just came back yesterday after spending three months in pakistan, the demography in politics there. i would like to -- [inaudible] about the future -- [inaudible] one thing that interested pakistan's -- [inaudible] 1998 and so -- [inaudible]
10:55pm
national assembly is dominated by -- [inaudible] it's that change that i don't think -- [inaudible] mention that pakistan's -- [inaudible] that had been shown by pti many of the seats were also -- [inaudible] -- [inaudible] but i saw -- [inaudible] -- [inaudible] it's coming from the educate -- [inaudible] i think that's the future. of a question -- [inaudible] the question is from --
10:56pm
[inaudible] i was expecting he wouldn't -- [inaudible] the second option some of these -- [inaudible] whenever we need to -- [inaudible] raise money. one thing that everybody has -- [inaudible] i don't know why. the second issue is -- [inaudible] cutting a few budget.
10:57pm
and that means that -- [inaudible] having a domestic warfare. so they need to -- [inaudible] [inaudible] increase the taxes to -- [inaudible] first of all, i don't think that pakistan is -- [inaudible] the situation is so bad it cannot borrow. most of the borrowing, but i don't think it's -- [inaudible] ingbeing in a particularly bad situation. i think it has -- [inaudible] the question you are raising is it's true. i mentioned that in my statement. you have to increase taxes and revenue in some way. and flu taxes.
10:58pm
but -- [inaudible] income tax is a constitution issue. it's not federal government issue. and therefore, the federal government cannot impose the tax. it has to be done by provinces. that is unconstitutional. it's an issue, i think that they should be -- [inaudible] it's a prevention issue. on cutting back expenditure. there's room for cutting back waste. cutting back -- [inaudible] please understand pakistan doesn't have a high -- [inaudible] it's constrained in the expenditure by the fact that the revenue are so low. i think it's -- if you just look at the expenditure and said it's spending 22% on the gdp spending
10:59pm
on both current spending and spending. i don't think it's -- [inaudible] people would say t way low for a country that stake in development. so, i mean, you may have -- other reasons to want to cut expenditures but, you know, military or whatever it is. ..
11:00pm
are living beyond its means. yes, it is, but its means are very small at the moment and that's a big issue they have to resolve. >> jim mcgee -- [inaudible] >> thank you very much. thank you. >> maleeha, sorry to lose you. >> i can see you. i knew you'd ask a question. >> two things. short-term and long-term. when i was in pakistan and east pakistan as well years ago, the literacy rate is about 40% in both p